Mexican immigrants who speak little English. Older adults with memory problems. College students opening their first bank accounts. Small-business owners with several lines of credit.
These were some of the customers whom bankers at Wells Fargo, trying to meet steep sales goals and avoid being fired, targeted for unauthorized or unnecessary accounts, according to legal filings and statements from former bank employees.
”The analogy I use was that it was like lions hunting zebras,” said Kevin Pham, a former Wells Fargo employee in San Jose, Calif., who saw it happening at the branch where he worked. ”They would look for the weakest, the ones that would put up the least resistance.”
Wells Fargo would like to close the chapter on the sham account scandal, saying it has changed its policies, replaced its chief executive and refunded $2.6 million to customers. But lawmakers and regulators say they will not let it go that quickly, and emerging evidence that some victims were among the bank’s most vulnerable customers has given them fresh ammunition.
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This week, three members of the Board of Supervisors in San Francisco, Wells Fargo’s hometown, introduced a resolution calling on the city to cut all financial ties with the bank. They cited both the recent scandal and past cases — particularly the $175 million that Wells Fargo paid in 2012 to settle accusations that its mortgage brokers had discriminated against black and Hispanic borrowers.
After the Senate Banking Committee held a blistering hearing last month with the bank’s chief executive, John G. Stumpf, who has since retired, it followed up with a letter containing 58 additional questions for the bank. Among them: What proportion of the harmed customers are old, members of ethnic minorities or military veterans?
The committee is still waiting for a response. The Justice Department and California’s attorney general are also investigating the bank.
In interviews and lawsuits, Wells Fargo employees have described in vivid detail some of the predatory practices they saw.
At a branch in Scottsdale, Ariz., members of a local Native American community would arrive like clockwork every three months with checks for their share of the community’s casino revenue. It was then, said Ricky M. Hansen Jr., a former branch manager there, that some bankers would try to dupe them into opening unnecessary accounts laden with fees.
In California, it was people with identification cards issued by Mexican consulates. The absence of a Social Security number made it simpler for Wells Fargo employees to open fraudulent accounts in those customers’ names. Wells Fargo is one of the few major banks to permit accounts to be opened without Social Security numbers.
And in Illinois, one former teller described watching in frustration as older customers fell prey.
”We had customers of all ages, but the elderly ones would at times be targeted, because they don’t ask many questions about fees and such,” Brandi Baker, who worked at a branch in Galesburg, Ill., said in an interview.
When Mr. Stumpf testified before members of Congress — once in the Senate and once in the House — he was pressed hard on whether any demographic group had been disproportionately affected. He said he was not sure.
Wells Fargo does not collect information on its customers’ ethnicity, Mr. Stumpf said. Of the two million potentially unauthorized accounts the bank uncovered in its internal review, the affected customers ”skewed to younger people, not older people,” he told the House Financial Services Committee.
In the Los Angeles area, for instance, college campuses were considered prime spots for employees seeking to rack up new accounts because younger customers had a tendency to trust a banker’s advice.
Athena McDaniel-Watkins, a former teller who worked in and around Los Angeles, said a banker she worked with would take stacks of forms with him on campus visits and encourage busy students to sign the blank papers — he would fill them out later, he told the students.
”So the customer essentially handed the banker a blank check,” Ms. McDaniel-Watkins said. ”The banker was then able to list as many accounts under that application as he wanted — or, in many cases, as many as he needed to hit sales goals for that day.”
Steven Curtis, who also worked at several Wells Fargo branches in the Los Angeles area, said that when college students showed up asking for overdraft fees to be waived, bankers would sometimes tell them they could do so only by closing their account and opening a batch of new ones.
The practices in California were also described in a lawsuit the Los Angeles city attorney filed against Wells Fargo in 2015. Among the complaints was that employees specifically sought out Mexican citizens because their identity documents were easier to misuse.
If customers complained, Wells Fargo employees advised them ”to ignore the unauthorized fees and letters from collection agencies because the lack of a Social Security number means the debt will not affect them,” the lawsuit said.
Since the scandal broke, Wells Fargo says it has eliminated the sales goals that pressured bankers to open sham accounts. It has also replaced Mr. Stumpf with Timothy J. Sloan, formerly the chief operating officer, and begun contacting all of its deposit customers to ask if they would like to review their accounts. The bank is still conducting an internal investigation into its sales practices.
”We are confident that these important steps put us on the right path to better helping our customers,” said Richele J. Messick, a Wells Fargo spokeswoman. ”We will continue to work hard to restore our customers’ faith and regain the public’s trust.”
Current and former Wells Fargo employees say the problems continued well into this year.
Ashlie Storms, a former banker at a Wells Fargo branch in West Milford, N.J., said she quit her job in August, soon after learning that a banker at another branch had manipulated the accounts of one of Ms. Storms’s regular customers, an older woman with memory issues.
The woman had come to deposit a large check, only to have the banker use it to open new checking and savings accounts without her approval. The next day, the customer and her daughters arrived at Ms. Storms’s branch, confused about where her money had gone and why she could not gain access to it.
”What should have been a five-minute conversation turned into a three-hour complaint to corporate from the customer about the actions this banker decided to take without the customer’s consent,” Ms. Storms said. ”The banker was a top producer for our region, always receiving recognition from management for her sales.”
The dynamics varied from branch to branch, former employees said in interviews. There was no systematic corporate policy or ethos of targeting specific groups of customers.
”Bankers wanted the quickest, easiest sale — the low-hanging fruit,” said Mr. Pham, the former Wells Fargo banker in San Jose. ”The extreme pressure forced people into it.”
In some places, demographic patterns created distinct openings.
In the Phoenix area, managers gleefully looked forward to the days when the Salt River Pima-Maricopa Indian Community made its quarterly per capita distribution payments, said Mr. Hansen, the former branch manager in Scottsdale.
Members of the Native American community would head straight to the bank with their checks, and employees would encourage them to use the money to open new accounts. Sometimes it was on the up and up: Mr. Hansen said that he looked forward to being able to open several dozen new accounts in one day but that he always tried to match customers with products that fit their needs.
Others did not. Mr. Hansen learned that one enterprising branch manager had invented ”per capita day packages,” jammed with five or more bank accounts. Customers would be told that they needed separate accounts for such purposes as traveling, grocery shopping and saving for an emergency.
”They would deposit their money and get hit with fees like crazy, because they got confused about what account they were using,” Mr. Hansen said. ”They would use the wrong debit card and overdraw their travel account, and then when they came back three months later, they would lose hundreds of dollars from their next check paying off those fees.”
While lawmakers and investigators continue digging, some Wells Fargo customers and former employees, including Mr. Pham, are meting out their own punishment. A group that coalesced on Facebook has declared Nov. 12 National Close Your Wells Fargo Account Day.
Some people are not waiting until then.
Michael Masterson, who lives in Concord, Calif., posted on the group’s Facebook page about refinancing his mortgage this week to move it away from Wells Fargo.
”This was an action I took as an individual looking to sever ties with what I regard as a dishonest financial institution,” he said by email..
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